<br><br><div class="gmail_quote">On Mon, Jan 21, 2013 at 9:39 PM, Riaz K Tayob <span dir="ltr"><<a href="mailto:riaz.tayob@gmail.com" target="_blank">riaz.tayob@gmail.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
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<font size="+2"><font face="Calibri">France Proposes an Internet
Tax<br>
By ERIC PFANNER<br>
<br>
PARIS — France, seeking fresh ways to raise funds and
frustrated that American technology companies that dominate
its digital economy are largely beyond the reach of French
fiscal authorities, has proposed a new levy: an Internet tax
on the collection of personal data.<br>
<br>
The idea surfaced Friday in a report commissioned by President
François Hollande, which described various measures his
government was taking to address what the French see as tax
avoidance by Internet companies like Google, Amazon and
Facebook.<br></font></font></div></div></blockquote><div><br><p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:10pt;font-family:Arial,sans-serif">Well
it not new that the US has always maintained that the Internet should
be a tax free zone as per the US Congress's Tax Freedom Act 1998 (<i>authored
by Representative Christopher Cox and Senator Ron Wyden and signed into
law on October 21 1998 by then President Clinton</i>) which following
expiry continued to be reauthorised and it most recent re-authorisation
(legal speak for extension) was in October 2007 where this has been
extended till 2014.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:10pt;font-family:Arial,sans-serif"> </span></p><p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:10pt;font-family:Arial,sans-serif">The <span class="il">OECD</span>
and the EU have been holding the opposite view (Kurbalija,J. 2010) -
see their Ottawa Principles where they find that there is no difference
between traditional and e taxation that would require special
regulations.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:10pt;font-family:Arial,sans-serif"> </span></p><p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:10pt;font-family:Arial,sans-serif"> It
followed that in 2003 when the EU introduced a regulation requesting
non EU e commerce companies to pay value added tax (VAT) if they sold
goods within the EU. The main driver or motivation was that non-EU
companies (many of whom are US companies) had an edge over European
companies. See one of the Reports - <span style="color:rgb(17,85,204)"><a href="http://www.oecd.org/tax/taxadministration/20499630.pdf" style="color:rgb(17,85,204)" target="_blank">http://www.<span class="il">oecd</span>.org/tax/taxadministration/20499630.pdf</a></span></span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><br></p><p class="MsoNormal" style="margin-bottom:0.0001pt">What is interesting is in light of the pressure on the economic systems in Europe triggered by the Greek economy and reliance on the Euro and aggravated by other external triggers such as food, energy and water crisis and even with the Indonesian and US Trade disputes will together with a host of other triggers have a cumulative effect that will force the outcome of tomorrow's Internet and tomorrow's regulations.</p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><br></p><p class="MsoNormal" style="margin-bottom:0.0001pt">Each country will ultimately exercise their sovereignty in how they regulate within their own turfs. For countries like France where their is high expenditure within their national budgets, in the midst of a depressed economic region will no doubt look for potential sources of revenue. Discussions on taxing the internet is not new, what will be interesting however is the "how" and to "what extent"? <br>
</p><p class="MsoNormal" style="margin-bottom:0.0001pt"><br></p><p class="MsoNormal" style="margin-bottom:0.0001pt"><br><span style="font-size:10pt;font-family:Arial,sans-serif"><span style="color:rgb(17,85,204)"></span></span></p>
</div><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div bgcolor="#FFFFFF" text="#000000"><div><font size="+2"><font face="Calibri">
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These companies gather vast reams of information about their
users, harnessing it to tailor their services to individuals’
interests or to direct customized advertising to them. So
extensive is the collection of personal details, and so
promising the business opportunities linked to it, that the
report described data as the “raw material” of the digital
economy.<br>
<br>
“They have a distinct value, poorly reflected in economic
science or official statistics,” the report said.<br>
<br>
Google generates more than $30 billion a year in advertising
revenue, including an estimated €1.5 billion, or $2 billion,
in France. Yet, like other American Internet companies, it
pays almost no taxes in France. That state of affairs upsets
France’s policy makers, as public finances have been stretched
thin and French Internet companies struggle to gain traction.<br>
<br>
“We want to work to ensure that Europe is not a tax haven for
a certain number of Internet giants,” the digital economy
minister, Fleur Pellerin, told reporters in Paris on Friday.<br>
<br>
But getting Google and other U.S. technology companies to pay
more corporate taxes on their profits in France could take a
long time, the report acknowledges, because this will require
international cooperation.<br>
<br>
In the meantime, France has discussed a variety of other
taxes. Under the predecessor to Mr. Hollande, Nicolas Sarkozy,
the government proposed a levy on Internet advertising. But
that idea languished after local companies complained that it
would affect them more than Google. Mr. Hollande’s government
is also overseeing talks between Google and French online
publishers, who want the search engine to pay them for linking
to their content.<br>
<br>
The report published Friday said a tax on data collection was
justified on grounds that users of services like Google and
Facebook are, in effect, working for these companies without
pay by providing the personal information that lets them sell
advertising.<br>
<br></font></font></div></div></blockquote><div>Does anyone have a link to this Report? It would be useful to read. <br></div><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
<div bgcolor="#FFFFFF" text="#000000"><div><font size="+2"><font face="Calibri">
The report says tax rates would be based on the number of
users an Internet firm tracked, to be verified by outside
auditors. The authors did not recommend tax rates or estimate
how much money such a levy could raise.<br>
<br>
Google said in a statement that it was reviewing the nearly
200-page report.<br>
<br>
“The Internet offers huge opportunities for economic growth
and employment in Europe, and we believe public policies
should encourage that growth,” the company said.<br>
<br>
The new tax would require legislation, which the government
said could be introduced by the end of the year. But other
revenue-generating proposals championed by Mr. Hollande have
encountered difficulty. A plan for a 75 percent income tax
rate on earnings of more than €1 million a year was rejected
by the highest court in France, which called it
discriminatory.<br>
<br>
Any proposal to generate taxes from the gathering of personal
information could also draw scrutiny from the French privacy
regulator, which has raised concerns about the amount of data
that companies like Google and Facebook collecT<br>
NYT<br>
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<br></blockquote></div><br><br clear="all"><br>-- <br><div>Salanieta Tamanikaiwaimaro aka Sala</div><div>P.O. Box 17862</div><div>Suva</div><div>Fiji</div><div><br></div><div>Twitter: @SalanietaT</div><div>Skype:Salanieta.Tamanikaiwaimaro</div>
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